Report Shows Stagnant Upward Mobility in U.S.

Add it to the other depressing economic news: upward mobility has remained stagnant in the past two decades.

A new report by Pew’s Economic Mobility Project broke individuals up into five income brackets or quintiles and found that of those in the lowest bracket, half were still likely to be there 10 years later. It’s a trend that held true for a group studied from 1984 to 1994 and reiterated itself in a group studied from 1994 to 2004.

The report by Urban Institute’s Gregory Acs and Seth Zimmerman, notes that “This finding is somewhat surprising given the changes in the economy in the 1980s and 1990s… Further, although it is promising news that, at least through 2004, mobility rates had not fallen, stagnant mobility rates may be a cause for concern in light of rising income inequality.”

The researchers looked at individuals between 25 and 44 years old and measured their mobility relatively compared to each other as well as in absolute terms. The report used data from the Panel Study of Income Dynamics.

In both relative and absolute terms, mobility rates were mostly unchanged. Relatively, of those that were able to move up, about one-quarter made it to the second quintile, 10% moved to the middle, 7% to the upper-middle and 4% reached the top.

Downward mobility was also essentially unchanged across the two decades with minorities and people with disabilities more likely to move downward.

The factors that contributed to upward mobility weren’t necessarily surprising. But the silver lining might be that race and gender were decreasingly important in determining upward mobility whereas controllable factors — education, hours worked, etc. were likely to have an effect.

Education, especially past high school, was a major factor. Across the two decades, people were 30 percentage points more likely to leave the bottom income bracket if they had more than a high school education.

The number of hours logged at work also played an increasing role in upward movement. Workers who put in an extra 1,000 hours had a better chance — by more than 12 percentage points — of moving out of the lowest quintile between 1994 and 2004. That’s a boost from the 1984-1994 group, where the extra work only increased their odds of moving up by five percentage points. –Sara Murray

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